Mr. FASCELL. How many are ongoing?

Mr. BELL. Of the 15 that have been approved, 11 I believe already received their first allotment of funds so those 11 are actually underway.

Mr. FASCELL. Does approval of the project by the Board mean funding?

Mr. BELL. Yes. Within approximately 10 days or at most 15, if everything else is ready, they can receive their first allotment of funds. Mr. FASCELL. It is a commitment of funding?

Mr. BELL. Yes.

Mr. DYAL. We are dependent upon a grant agreement signed by both parties following the Board approval before obligation of funds. Mr. FASCELL. So, first you have a grant agreement; then the Board approves the project, and subsequently the grant agreement is entered into and becomes the basic operating document.

How many host countries do you have? There are 11 projects in being and 15 have been approved. How many host countries are there? Mr. DYAL. Nine.

Mr. FASCELL. What is the total amount of committed funds?

Mr. BELL. $2,558,000, in terms of approved projects.

Mr. FASCELL. What is the amount of expended funds?

Mr. DYAL. Mr. Parker, can you provide that, if we can ask our director of administration and finance?

Mr. FASCELL. The total amount of committed funds you mentioned is from the beginning?

STATEMENT OF LEON M. PARKER, DIRECTOR OF ADMINISTRATION AND FINANCE, INTER-AMERICAN FOUNDATION

Mr. PARKER. That is the total of approved projects. Actual expenditures to date have been $345,595, with approved projects totalling $2,558,657 and formal obligations of $1,998,657.

Mr. FASCELL. What is the period of time for the figures you are giving us?

Mr. PARKER. Those figures are as of yesterday-April 24—and the initial obligations were posted in January of this year.

Mr. FASCELL. So you have had an operational period of 4 months? Mr. PARKER. Yes.

Mr. FASCELL. What is the amount of money which is available to you?

Mr. DYAL. For projects in fiscal year 1972, $6.7 million, allocated by the Office of Management and Budget.

Mr. FASCELL. What is the present status of your authorization and appropriation?

STATEMENT OF IRVING G. TRAGEN, VICE PRESIDENT FOR PLANNING AND LIAISON, INTER-AMERICAN FOUNDATION

Mr. TRAGEN. Mr. Chairman, $50 million was initially authorized in the legislation passed by the Congress in 1969.

Of that amount, we have something in the neighborhood of $47 million in total funds available, of which under the appropriation limita

tion enacted by Congress for fiscal year 1972, a total of $10 million may be spent in this fiscal year.

That means we anticipate then that we have still available of the initial $50 million, about $47 million on which we have the $10 million limits mentioned above in this year.

Mr. FASCELL. For fiscal year 1972, which we are now in, you have how much left? $6.7 million?

Mr. DYAL. That is the total amount for program funds allocated by the OMB. In addition, we have one point three for program support, for a total of eight.

Mr. FASCELL. June 30 is right around the corner. You are in the last quarter. What is that going to mean? Are you going to have a carryover and, if not, why not?

Mr. DYAL. We do not have a problem in terms of carryover because funds remain available until expended. Consequently we do not have to rush around and obligate all this money.

Mr. FASCELL. You cannot very well be accused of wasting money by trying to meet a deadline.

Mr. DYAL. Definitely not. That is the beautiful thing about the multiyear approach. It means a much more intelligent approach to project funding. I expect during this fiscal year, which does end June 30, that we will have funded somewhere between $3 and $4 million in projects.

Mr. FASCELL. It took a long time, more than a year, to even start the funding. It took about 15 months from the time the legislation was passed to get you as a director. We might as well get on the record, Mr. Dyal, why it took so long? We would also like to know whether or not the inertia, if that is the kindest way to express it, or the opposition that has existed in the Government has finally been ended? Is the future now bright, rosy, and free from those kinds of obstacles, at least?

Mr. DYAL. I like the bright and rosy part of that you talked about. Save the violins and music for the end. I think, Mr. Chairman, that the experimental nature of the organization is rather plain to everyone. We are small. We have a small amount of money relatively speaking, in terms of total foreign assistance.

We escape notice in a certain sense, because of that. At the same time, I think there is a wait-and-see attitude on the part of both public and private sector to a certain extent.

I do not see at this point either organized or subtle opposition to our organization or the approach we make. In fact, on almost every hand, I believe we have been helped immeasurably during this past year to cut a path through the bureaucracy. The best evidence of this help is my being able to sit here before you today and talk in terms of fulfilling the intent of the legislation that dates back to 1969 and whose roots run even to the middle or early 1960's.

I am pleased to be able to say that a year after operations began and 2 years approximately after the legislation went into effect, we are very much on target in terms of being a responsive organization with a nonpaternalistic approach; a participant with Latins and Caribbeans of their own initiatives, in projects that remain within their hands and control and that we are beginning to be seen and

understood in that light by grantees and potential grantees in the field.

I must say at this point the official establishment of the United States and the U.S. organizations in the private sector, I believe, are beginning to understand this approach even though they may disagree at times with what is done. I recognize that disagreement. But, at least, we are attempting to help them understand; and, I believe, communication is taking place.

Mr. FASCELL. It has been said that what you are doing really is the same thing that AID was doing under title IX of the Foreign Assistance Act or what the Peace Corps has been doing for years. The implication is that you are really not innovative. Please discuss with us some of the projects mentioned in your appendix and tell us any critics who might be interested how innovative you are.

Take any number that you think are illustrative.

Mr. DYAL. Mr. Chairman, I think some of the same motivation and energy that went into title 9 of AID and the Peace Corps and other efforts, even in the private sector, is obviously involved in the life of the foundation.

The difference in approach really is one of both methodology and understanding of our role. The methodology is that we are not project operators ourselves. We are not a body of technical assistants from the United States to Latin America.

Our role is that of a participant responsive to social development opportunities which are proposed to us and are not generated by us. Let me describe quickly several of these organizations that we have funded. I will begin with the one that was mentioned earlier, known as COPAC which is a Corporation de Papeleros de Colombia, a group of trash collectors and processors.

We made a grant of $23,300 to this group through the parent corporation Codesarrollo.

Codesarrollo is an organization of Medellin business and professional men who have been concerned about social development at a grass roots level.

In 1963, a group of unskilled, unemployed workers whose average family income was 50 cents a week formed a trash collector's company to prepare and sell paper for recycling.

Assistance was sought from Codesarrollo and COPAC, the group of trash processors and collectors was born.

Since then it has grown to almost 400 workers. That is really representative of 400 families whose weekly income now averages $4, and yet COPAC is not yet able to obtain commercial credit through normal Colombian outlets. They have been looking for some time for some one to provide this limited sum of money of about $20,000.

Probably if it had been in the millions, it would have been easier to look at than in the thousands. Because they were trash collectors and processors, they oftentimes escaped attention in that process. It is a profit-sharing corporation and this grant enables them to purchase baling, transportation, weighing, and carpentry equipment which will allow them to upgrade the effectiveness of the operations to compete in the labor market and production and recycling process and to increase worker income by 50 percent. This stays within their hands. They control it and maintain it. They have already raised some money

on their own to supplement the grant and had received an offer of some property.

We found this project to be really a unique model aimed at alleviating in some measure the growing unemployment problem in Latin America, with really a minimal capital investment.

We recognized that aiding 400 families to have a greater control over the income and processes affecting their lives is a very small drop in the bucket. The thing that interested us is that, to put it quite bluntly, there is trash everywhere; there are trash collectors everywhere and trash processing everywhere, but this as far as we know is a unique opportunity which pulls people together in a cooperative effort via a mechanism of a profit-sharing corporation at that level and enables them to control those processes, eliminate intermediaries who tend to pull off most of the proceeds and at the same time contribute an important business need to a community.

I suppose you could add the environmental factor which is popular today and have yet another aspect which is particularly important. We believe this model has opportunity for adaptation and replication in other parts not only of Colombia but South America.

Mr. Fascell. What do you have to support that belief?

Mr. DYAL. We have to support that belief that already they are being sought out by a number of groups from other cities and interest has been raised in other countries because of this particular approach.

Mr. FASCELL. Is your funding a one-shot proposition for this organization?

Mr. DYAL. It is a one-shot proposition. I doubt that they will need another dime from us.

Mr. FASCELL. Give us another project.

Mr. DYAL. Another one is a half million dollar grant to the Mexican Foundation for Development. This is a child of the Pan-American Development Foundation although they have not received prior funding from any outside source. The Mexican Development Foundation concentrates on helping subsistence farmers, which is the smallest farmer who cannot even buy a mule because he has no collateral to do so. Mr. FASCELL. You mean he has to have it to stay alive?

Mr. DYAL. That is about it. They have organized pilot regional services with funds raised primarily from the local Mexican businessmen scattered over the country. These centers provide technical services needed by subsistence farmers to join the cash economy, to help organize themselves into democratic grassroots organizations and to get them credit from the commercial bank by arranging for guarantees by responsible private business.

The Mexican Development Foundation, a private organization, controlled and operated by them, is now converting its pilot efforts into a systematic national program.

It is in the process of raising a half million dollars from cash from Mexican sources. Our response would be a matching response to them in that process.

Mr. MONAGAN. Could I ask a question?

Mr. FASCELL. Mr. Monagan.

Mr. MONAGAN. The first project seems to me viable in a sense that you can see the results.

Mr. FASCELL. You mean the trash pickup project?

Mr. MONAGAN. Yes. And employment of 400 people and the interest in other cities, but what does this mean? I read this before, help incorporate subsistence farmers into the national economy. Does that mean make them more successful as farmers or get them out of subsistence farming and into some other activity and is this flying in the face of economic realities when you try to preserve what we call a family farm against the competing economic and technical forces?

Mr. TRAGEN. I think, Mr. Congressman, that there are two ways of viewing this. The first is that Mexico does have a large rural population.

This population is producing at this time only for its own consumption. The kind of assistance that is being provided by the Mexican Development Foundation allows them to better use their land, to better produce. It helps them over the initial problems of production and brings them to a point where applying the technical help which they have been given, they are able to use credit. By helping to organize them, not merely as individuals but into groups of producers, the Mexican Development Foundation helps to make them more efficient, and hence to use the credit that is then made available to produce for the marketplace with a decidedly favorable effect on the income of the various farmers involved.

The other aspect of the project is that it does not limit itself merely for economic ends. By helping to organize the subsistence farmers into groups which they understand, they also become more effective participants in the social and political life of their own communities.

And the Mexican Development Foundation is doing it in a way that directly involves the private sector which up to this point has been largely urban in its orientation. It stimulates the Mexican private sector to begin to work with the marginal rural sector and creates a greater awareness of what that rural sector can contribute to the total economy of Mexico. I think that the question of whether or not the family farm is marginal is one which we can get into a lengthy debate about but

Mr. FASCELL. It depends on who it is marginal for. It may not be marginal for the guy who started it.

I think the question is deeper than that. It is a good project but is it innovative? What is new about an agricultural cooperative? That is the $64 question.

Mr. TRAGEN. I think what becomes very new about it is that this is an attempt to create a service center at the level of the Campesino, not a kind of national extension service but a service center at the level of the Campesino to work and help him in his terms and to enable him in his terms to begin to apply some of the technology which has been developed.

Up to now we have talked in terms of broader services across the board but this one really takes it down to the level of the farmer and the organization of the farmer then is in the terms of the farmer, himself.

Mr. DYAL. If you could add to that, also, Mr. Tragen, here you have the unique situation of local resources, private resources not always emanating from Mexico City and a handful of elitist businessmen, but the resources they are raising in this half million dollars in cash as well as the credit guarantees, are regional in nature, scattered over